Bitcoin slumps below $20K as 2023 bull run reverses

Bitcoin (BTC) has recently fallen below the significant $20,000 level for the first time since mid-January, marking a sudden shift in the cryptocurrency's 2023 upward trend. Over the past 24 hours, the largest digital currency by market capitalization has dropped by 7.7% to around $20,040, albeit with some recovery late on Thursday (ET).

This year began on a low note for Bitcoin, as it traded at around $16,600 after experiencing a decline throughout 2022. However, it staged a powerful rally that carried it to $25,000 by mid-February, representing a more than 50% surge for the year at that point. Nevertheless, subsequent events have contributed to a wave of bearish sentiment among investors, prompting sellers to come out in force.

One factor that has weighed on the cryptocurrency's value is a higher-than-anticipated inflation report that has cast doubts on the U.S. Federal Reserve's assertion earlier this year that disinflation was underway. The Fed Chair, Jerome Powell, recently told Congress that the central bank still had a lot of work to do to achieve its 2% inflation target.

In addition to inflation fears, there was the collapse of crypto-friendly lender Silvergate Bank on Wednesday evening. Furthermore, the U.S. Department of Justice's move to transfer 49,000 bitcoin seized from darknet marketplace Silk Road to new addresses has raised speculation that the government may soon sell that sizable stash. These developments have combined to create a bearish outlook for Bitcoin, causing its value to fall below the crucial $20,000 level.

Major cryptocurrencies are trading as follows as of 9 am IST, 11th March 2023:

Bitcoin: $20,646.60

+1.69%

Ethereum: $1,480.02
+2.39%

Tether: $1.02
+0.54%

USD Coin: $0.9969
-0.62%

BNB: $283.54 USD
+2.06%

XRP: $0.376
-0.39%

Dogecoin: $0.06805 USD
+1.47%

Cardano: $0.3238
+3.33%

Polygon: $1.07
+5.03%

Polkadot: $5.70 USD
+3.99%